Lawyer’s Advocacy in Arbitrations: No. 9 of the Top 10 Horrible, Terrible, No Good Mistakes Lawyers Make: Be Creative with Proof and IssuesDavid K. Taylor, Bradley Arant Boult Cummings, Nashville, TN
dtaylor@bradley.com
615-252-2396

There’s a great argument that lawyer advocacy in an arbitration is more essential than at a trial in court. This post is the ninth of the top 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make in arbitrations, both when I served as counsel and as an arbitrator. Agreeing to arbitrate a dispute, whether in a contract or by agreement, is a serious decision for any business. There are pros and cons to binding arbitration versus trial in a court that go beyond a series of blog posts, but the fact is that when a dispute is arbitrated, finality is the rule. It is very difficult to appeal an arbitration award. In many instances, representing a party in an arbitration requires more due diligence and work than a trial. Great “arbitration” lawyering is therefore essential but sometimes does not happen.

No. 9: Not Being Creative with Proof and Witnesses 

In a typical trial, the plaintiff goes first with witnesses followed by the defendant’s witnesses. There may be multiple parties and claims, and the trial can stretch out over many days.  Key witnesses or experts could testify on day one, and the witnesses (including experts) who rebut that testimony on those issues may not testify until days later. The judge’s schedule may also dictate trial time and scheduling. Witnesses will not normally be taken “out of turn” regardless of their circumstances. The result may be testimony on claims one, three, and five on the first day of trial, while the rebuttal witnesses may not provide testimony until days later. Whether in front of a judge or jury, this lack of continuity of witnesses can cause confusion, especially when there is no trial transcript for a judge or jury to review. They have to rely on notes (if allowed to a jury) and/or pure memory.

While in arbitration hearings arbitrators face some of these same continuity issues, this is where the more informal nature of arbitration can be a real advantage. It may be harder for the arbitrators to review the testimony than a judge. Keeping this in mind, be intentional about the order of presentation of your witnesses. In arbitration, you are likely to have more flexibility with the order of witnesses and the hours made available for the presentation of evidence. Always remember that the arbitrator is being fed facts and arguments through a fire hose and is relying only on notes taken while a witness is testifying, as well as (typically) volumes of exhibit books chock full of exhibits. Therefore, put on your thinking hat. Arrange the exhibit books (see previous post) and include separate “claims/issues” sections for easy access, not just for the arbitrator but for you and your witnesses’ preparation. Arbitrators appreciate any effort or suggestion to narrow down issues and claims and present all evidence on a specific claim at the same time. Creativity with how issues, witnesses, and claims are presented is the key. Zoom and telephone testimony can be arranged (remember the rules of evidence do not apply). You can suggest what’s called “hot boxing” and propose having key witnesses from both sides testify back to back on key issues. For experts, consider having them present their opinions one at a time, or even at the same time, by going back and forth answering questions from all counsel and the arbitrator. Especially in a dispute where there may be scores of issues and claims, your efforts to make sure the arbitrator’s job is easier will pay off in the final result.

Read numbers 1, 2, 3, 4, 5, 6, 7, and 8 on the list.

Important Changes to International Arbitration ProceduresTo all our friends with international projects, partners, or contracts, please take note of some significant changes to one of the potential sets of procedures and rules that may govern or apply to your international dispute. The International Centre for Dispute Resolution (ICDR) recently amended its Dispute Resolution Procedures (including its Arbitration and Mediation Rules), which became effective on March 1, 2021.

The general thrust of these changes was to increase efficiency and cost-effectiveness. The updated rules also seek to address important current issues and dynamics, including, most notably, the ongoing COVID-19 pandemic. These amendments are the result of a year-long effort by the various arbitration experts around the world who make up the drafting committee.

In terms of efficiency and cost-effectiveness, the updated rules encourage the consideration of early disposition of issues, emphasize and incorporate the use of mediation, raise the ceiling amount for expedited arbitration procedures, and expand the applicability of these procedures.  After almost a year of navigating international disputes in a world with very little travel or face-to-face interaction, the ICDR drafters worked to address the ever-changing dynamics of the COVID-19 world, including the increasing role of video and virtual communications. Finally, there are other issues and developments addressed by the amendments, including the rise of third-party funding; the duty to discuss cybersecurity, privacy and data protection; transparency regarding ICDR decision-making; joinder and consolidation; arbitral jurisdiction and arbitrability; and the use and role of tribunal secretaries.

In addition to amending the Arbitration Rules, the ICDR also amended its Mediation Rules, including changes to address the procedure for the appointment of a mediator, guidance regarding the mediation process, and potential enforcement of settlements under the Singapore Convention on mediated settlements.

If you do business in the international arena or with businesses around the globe, take note of these key changes as they may very well alter the way international disputes are adjudicated. And, as always, remember the importance of the primary set of rules that govern your project or dispute: the contract.

GAO Clarifies the Scope of Its Jurisdiction over OTA ProtestsThe Government Accountability Office (GAO), in Spartan Medical, Inc., B-419503, recently clarified the scope of its jurisdiction over bid protests involving an agency’s use of its other transaction agreement (OTA) authority. The GAO’s decision in this case is noteworthy because agencies are increasingly relying on OTAs to meet their procurement needs.

The Facts

On November 12, 2020, the Air Force issued a solicitation seeking “white papers or solution briefs” responding to the need for rapid point-of-care and point-of-use COVID-19 testing products. Among other things, the solicitation stated that it sought responses from “vendors who have developed or are developing products that . . . [h]ave potential to achieve manufacturing production rates of 100K – 1M tests/day within 3-4 months of contract award.” The solicitation also notified vendors that the Air Force contemplated that award would be made pursuant to the agency’s OTA authority contained in 10 U.S.C. § 2371b. The solicitation established a closing date of December 7, 2020.

The contractor at issue never protested the agency’s use of the OTA vehicle before proposals were due. Instead, on or before the December 7 closing date, the contractor submitted its response to the solicitation, identifying therein that it is the distributor of a product manufactured by another business entity. On December 18, the Air Force notified the contractor that its solution would not be further considered. On January 4, 2021, the contractor filed a bid protest with the GAO, challenging the Air Force’s use of its OTA authority as well as the Air Force’s bases for eliminating the contractor from further consideration. The Air Force requested dismissal of the protest, asserting that the complaints were untimely filed and/or beyond the GAO’s protest jurisdiction.

The Holding

At the outset of its decision on the protest, the GAO noted that, under the Competition in Contracting Act of 1984 (CICA) and the GAO Bid Protest Regulations, the GAO reviews protests concerning alleged violations of procurement statutes or regulations by federal agencies in the award or proposed award of contracts for the procurement of goods and services, and solicitations leading to such an award (see 31 U.S.C. §§ 3551(1), 3552; 4 C.F.R. § 21.1(a)). However, the GAO noted that, in circumstances where an agency has statutory authorization to enter into “contracts . . . [or] other transactions,” the GAO has concluded that agreements issued by the agency under its “other transaction” authority “are not procurement contracts.” Accordingly, the GAO noted that it generally does not review protests of the award or solicitations for the award of these agreements under its bid protest jurisdiction.

The GAO then stated that, “The only exception to this general rule pertains to situations where an agency is exercising its OTA authority, and the protester files a timely, pre-closing date protest alleging that the agency is improperly exercising that authority.” The GAO further stated that, “Where a protester is aware that the agency has issued a competitive solicitation seeking to enter into an OTA pursuant to its statutory authority, any protest regarding the use of that authority must be filed prior to the time for receipt of initial proposals.”

The GAO went on to find that the solicitation expressly placed the protester on notice that the Air Force intended to make the award pursuant to its OTA authority. . The GAO found that, on this record, the protester’s assertion that the Air Force’s use of its OTA authority in conducting this procurement was not timely filed, and the contractor’s challenges to the Air Force’s evaluation of the response to the solicitation are outside of the GAO’s bid protest jurisdiction.

The Takeaway

The GAO’s Spartan Medical decision merits discussion because it is yet another example of an agency using its increasingly popular OTA authority for what otherwise looks like a standard procurement for products and the GAO stepping back from having much of a role in reviewing the reasonableness of the agency’s decision. The case also serves as a reminder to contractors that, if they want relief from the GAO regarding an OTA, it is necessary to challenge the decision to use the OTA in the first place, rather than the selection decision after the fact.

If you have any questions about the GAO’s decision in this case, or about OTA protests in general, please feel free to contact Aron Beezley or Patrick Quigley.